The hotel, originally built in 1987, underwent an extensive renovation that began in 2012 and included all the rooms and common areas, the lobby, restaurant and bar. The façade was updated in 2015, and a modern conference facility is expected to be added this year.

Grand City Hotels, one of Germany’s largest hotel operators, will continue to manage the hotel and has entered into a 20-year net lease that is fully guaranteed by its parent company and includes fixed annual rent escalations.

The site is adjacent to the passenger terminal at the Stuttgart airport, the sixth-busiest in Germany with 10 million passengers a year. In addition, Messe Stuttgart, Germany’s ninth-largest trade center, relocated next to the hotel in 2007. Ernst & Young’s new German headquarters, which is also adjacent to the hotel, is expected to open this year.

Partly driven by the presence of major firms like Bosch, Mercedes, Porsche, Lenovo and Siemens, in 2014 Stuttgart reportedly hit new records for both hotel guests and overnight hotel stays.

CPA:18 – Global has been busy in Germany in recent months. Last May, W.P. Carey announced an agreement by CPA:18 – Global to fund the completion of a new 290-room upscale hotel (later revealed to be a Marriott) in Munich. The REIT committed to provide about $85 million toward the hotel, which will be leased for 20 years following its completion in early 2016.

And in June, CPA:18 – Global agreed to provide about $29 million toward a new hotel in Hamburg, to be leased for a 25-year term by the German affiliate of Melia Hotels International. The Innside by Melia hotel, scheduled for completion in summer 2017, features about 207 rooms.

“Our decision to invest in these properties was based on the combined merits of the individual assets, their sponsorship and the strength of the local market, as opposed to targeting a specific market,” Arvi Luoma, executive director at W. P. Carey, told CPE.

“Many German cities such as Munich, Hamburg and … Stuttgart have attractive hospitality characteristics with strong drivers of demand, occupancy levels and long-term prospects,” he explained. “While we certainly hope to undertake further acquisitions in the German hotel sector, our focus is pan-European rather than directed at any one country, with each deal being evaluated on its longer-term risk-return factors.”